Record the expiration of prepaid rent


Question: The person keeping the financial records forgot to record the expiration of prepaid rent during the current year. The result of this error is that:

            Net Income        Owners’ Equity        Assets

    A)        overstated        understated            understated
    B)        overstated        overstated               overstated
    C)        overstated        understated              no effect
    D)        no effect            no effect                  no effect

Please select one of the following answers stated above.

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Accounting Basics: Record the expiration of prepaid rent
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